US stocks Jumped Nasdaq weakened
The strength of financial and energy stocks drove the Dow Jones Industrial Average to a record closing high on the 16th. However, President Joe Biden’s $1.9 trillion bailout case is progressing and the number of confirmed cases of COVID-19 has fallen. Unable to help other important indexes continue to climb higher, mainly because the rise in U.S. Treasury yields has aroused market concerns.
The Dow Jones Industrial Average rose 0.2% (64.35 points) on February 16 to close at 31,522.75 points, a record closing high. The Nasdaq Index fell 0.34% (47.97 points) to close at 14,047.50 points. The Standard & Poor’s 500 Index fell 0.06% (2.24 points) to close at 3,932.59 points. The Philadelphia Semiconductor Index rose 0.59% (19.05 points) and closed at 3,238.92 points, a record closing high.
CNBC’s quotation shows that the US 10-year Treasury bond yield jumped 9 basis points to 1.30% on the 16th, a record high since February 2020, and the 30-year Treasury yield also set a new high in a year. Many Wall Street people believe that rising yields will reduce the attractiveness of the stock market, which in turn poses a threat to technology stocks that benefit from a low interest rate environment.
JPMorgan Chase & Co. and Goldman Sachs rose 2.41% and 1.84% respectively on the 16th. Art Hogan, chief market strategist at National Securities, said that although rising yields are beneficial to banks, it has impacted groups of fixed dividends such as real estate investment trusts (REITs), public utilities and livelihood necessities. He said that although the market has the opportunity to digest the rise in yields (especially if the reason for the rise is correct), it cannot cope with the upward trend in yields.
Market tensions increased. The Chicago Option Exchange Volatility Index (VIX) used to measure panic in the market jumped 7.46% to close at 21.46 points on the 16th.
In contrast, rising oil prices due to the severe cold in the southern United States and freezing of oil pipelines have encouraged energy stocks. West Texas Intermediate (WTI) crude oil futures rose above the $60 mark for the first time in more than a year. The Electric Reliability Council of Texas (ERCOT) estimates that on Monday (February 15) about 2 million households have no electricity available. The severe cold weather hindered the transportation of crude oil and fuel oil and the refinery was also forced to shut down.
The SPDR Energy Index Fund (Energy Select Sector SPDR Fund, code-named XLE.US), which tracks U.S. energy stocks, jumped 2.51% to close at $45.79, setting a new high since June 8, 2020; it has been large since February. Up 16.45%.
In terms of individual stock changes, Palantir Technologies Inc., a provider of counter-terrorism and intelligence analysis platform, unexpectedly fell into a loss in its fourth-quarter financial report. Even if revenue growth was better than expected, the stock price fell 12.75% to close at 27.84 US dollars.
IMAX Corp., a provider of film and entertainment technology, soared 6.49% to $19.85. J.P. Morgan analyst Alexia Quadrani published a research report that pointed out that the strong performance of the Chinese movie box office last week suggests that the film entertainment industry is also expected to recover strongly after the epidemic in the United States.
During the Chinese New Year holiday of Taiwan stocks, the U.S. stock market has been rising for two consecutive weeks, oil prices hit a 13-month high, and U.S. long-term bond yields rose, making energy and financial stocks the leading group. The U.S. stock market is closed for President’s Day this Monday.
The market expects Congress to pass Biden’s $1.9 trillion fiscal stimulus plan. Even if the University of Michigan Consumer Confidence Index unexpectedly dropped to a six-month low, mainly because low-income households are uneasy about their finances, the stock market has little reaction to this. .
In fact, the House of Representatives passed half of the Biden bailout case last Thursday (February 11), approving a plan to issue $1,400 checks to millions of Americans, as well as other provisions opposed by Republicans. U.S. Treasury Secretary Janet Yellen called on Congress to push for further fiscal stimulus at a virtual meeting of finance ministers and central bank governors of the seven major industrial countries (G7).
On the other hand, Biden’s campaign promise of 100 million doses of COVID-19 vaccination within 100 days of his inauguration is expected to be fulfilled as scheduled. In the past three weeks, more than 26 million vaccine doses have been administered in the United States. According to data from The Centers for Disease Control and Prevention (CDC), of the 331 million people in the United States, approximately 34.7 million have received at least one dose of the vaccine; an average of 1.62 million doses per day in the past week. Biden announced on the 11th that by the end of the summer, the United States will have enough vaccines for 300 million Americans.
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US stocks jumped Nasdaq weakened - /10